Question: I NEED STEP BY STEP ANSWER, SO I CAN UNDERSTAND WHAT I AM DOING (3) A chemical company is expanding its operations and a disused

I NEED STEP BY STEP ANSWER, SO I CAN UNDERSTAND WHAT I AM DOING

(3) A chemical company is expanding its operations and a disused woolen mill is to be converted into a processing plant. Four companies have submitted designs for the equipment which will be installed in the mill and a choice has to be made between them. The manager of the chemical company has identified three attributes which he considers to be important in the decision: cost, environmental impact and reliability. He has assessed how well each design performs on each attribute by allocating values on a scale from 0 (the worst design) to 100 (the best). These values are shown below, together with the costs which will be incurred if a design is chosen.

Design Cost$ Environmental impact Reliability

A 90,000 20 100

B 110,000 70 0

C 170,000 100 90

D 60,000 0 50

(b) Eventually, the manager decides to allocate environmental impact a weight of 30 and reliability a weight of 70. By plotting the benefits and costs of the designs on a graph, identify the designs which lie on the efficient frontier

(c) The manager also decides that if he was offered a hypothetical design which had the lowest reliability and the worst environmental impact he would be prepared to pay $120,000 to convert that design to one which had the best impact on the environment but which still had the lowest level of reliability. Which design should the manager choose?

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